With a new Prime Minister just around the corner, it is a good time to think anew and reflect on what is really needed for small businesses.
With a new Prime Minister just around the corner, it is a good time to think anew and reflect on what is really needed for small businesses and how Government can supercharge this most important, and inspiring, part of our economy and communities.
There are some clear things that the next leader needs to do to support our nation’s 5.6 million small businesses, who are facing yet another mountain to climb with the cost-of-living crisis biting hard and a recession biting harder.
Top of the list should be a VAT cut, to inject some fast-acting pain relief into the economy. Reducing VAT will absolutely drive spending, reduce the pressure on consumers who are really starting to tighten their belts, and grow confidence as businesses see an immediate uptick in customers. The knock-on impact as this ripples through the economy will bring more optimism, and that is absolutely what businesses need to see right now. It doesn’t solve all problems, but is a great step in the right direction.
Even with a VAT cut, small businesses up and down the country will face increasingly stormy waters, and many have very little in the way of reserves to fall back on after the last two years. They need powerful interventions that deliver impact at pace. Because the stark reality is that many firms are running out of time and energy.
With this in mind, the Prime Minister also needs to look at broader support for small businesses. And here there needs to be a laser-sharp focus on where the bulk of potential lies – the very smallest businesses. These ‘little guys’ – the nation’s army of sole traders and micro businesses – total around 5.3 million. While small individually, they make up the core of the economy and represent the future rocket fuel that will power our country’s economic growth.
With the right nurturing these microbusinesses have massive potential to take root and grow; creating jobs, prosperity, innovation, and a broader intangible value to communities along the way. But to kick start this magical alchemy there needs to be a catalyst - a support programme to fire up the potential of these fledgling businesses and help them to develop. Although great for the businesses it supports, the Help To Grow government-backed programme is not available for these little businesses, and so it is time to deliver something that is.
And this ladders up to a much broader point. A more inclusive approach to entrepreneurship is needed in this country, so we make the most of the diversity of talent in our communities and unlock potential on a bigger scale.
There is huge scope for new leadership to make its mark here. Unlocking the vast potential of the whole economy needs to be core to thinking around entrepreneurship, and the long-awaited Enterprise Strategy. If inclusivity means engaging female founders, ethnic minority founders and disabled founders, shoehorning this “inclusivity” into a strategy means you are designing a world for 25% of the population, then adapting it for the other 75%. We need to think about these perspectives, needs and opportunities right at the start. An enterprise strategy for all would unlock massive economic potential – and that is something that we can definitely get behind.
Take disabled founders. Nearly a quarter of entrepreneurs are disabled or neurodiverse. As natural problem solvers, disabled founders are a phenomenal and diverse group that have much to offer to the economy and society. Yet too often their needs are seen as resting within the welfare agenda of the Department of Work and Pensions (DWP) and not enough as a powerhouse for the economy.
Making sure we challenge thinking like this, and that the support we offer small businesses is flexible and accessible for all, would empower the full force of the UK’s vibrant small business community.
Because entrepreneurship is by nature a melting pot of people, ideas and motivations. People start businesses for lots of different reasons. Some want to make millions and found the next unicorn start-up, while others dream of making a decent living independently and fixing problems in their communities, or broader issues in society and the planet. A huge number desire greater flexibility and freedom in their lives, whether it is to care for children, older relatives or to accommodate other needs, like preserving mental or physical health.
Running your own business can offer an incredibly rewarding path to fulfil all these different dreams. But sadly there are still huge barriers to who succeeds in this space, and who is able to try in the first place. With almost a third of young people living in poverty in the UK, entrepreneurship is closed off for too many. We need to stop economic deprivation being a barrier to people starting and growing a business, and guide more to reach their potential through the magic of entrepreneurship.
Running a business will never be easy or straightforward, and this is particularly true today. The same goes for the task of running a country. But a leader that is ready to take bold action to back entrepreneurs – all of them, and all of the way - has a winning formula to help steer the UK from this difficult time into a much brighter future.